Extreme Makeover - Credit Edition
When questioned about finances, the average Australian will tell you that they are confident about their money-saving, budgeting and debt managing capabilities. However, this is completely contradicted by recent findings that debt and bankruptcy levels in Australia are getting higher and higher every year.
There is so much information out there about the effects of bad credit files, but this of course is no help if you are one of the many Australians that are already in the sinking financial boat.
If only life was really like an episode of Extreme Makeover. Some crazy spiky-haired guy on a megaphone would march into your office announcing that he and his team of professionals were going to send you on an all expenses paid holiday while they perform a complete overhaul on your finances.
Problem solved…well not really.
This is but a pipe dream (or an idea for a new TV show), and if we wait for this to happen, things are only going to get worse. So what you really need is to take some strategic steps towards repairing your credit file.
There are various ways to go about improving your credit file. The first step is to decide whether you need to repair it or rebuild it. Repairing your credit file involves fixing the negative items that contribute to your bad rating.
This may be such thing as updates not being made on the status of missed or late payments or paid tax liens.
To rebuild your credit you need to take the steps necessary to ‘overwrite’ your credit file. This involves addressing the negative items and taking steps that outweigh them. Resolving overdue payments and keeping up those payments, on time every time will soon see your credit report on the rise again.
While things such as Bankruptcy and Tax Liens stay on your credit file for a number of years, it is better to show that all those loose ends have been tied up rather than having them left unresolved.
As a credit consumer with disputes it is your right to launch an investigation. This approach can be good as you are able to see how your dispute progresses. However, it can be a very long and drawn out process getting any results without the weight of a company name behind you.
To get the best results ensure that letters of dispute are well written with all the necessary information. It is also a good idea to provide evidence of payments such as copies of receipts in order to reinforce your claim. Credit agencies receive hundreds of dispute letters every day, so if you have a clear and concise letter your dispute will be much faster and easier to process.
Your other option is to use a credit repair organisation. There are a lot of them out there just ready and waiting to rip you off, it’s sad but true. So when looking for a company, it is best to find one that is backed by a reputable law firm. This means they will be subject to government rules and regulations and attorney-client confidentiality.
Also look for reviews and published records so you can make the choice that is best for you. In both the DIY and credit repair organization options, it is important you do your research in order to avoid falling prey to scams.
Most credit problems begin when people are late in their debt repayments. Often before people even realize they’ve done it, they will over-spend and create excessive debt, resulting in not being able to keep up with financial requirements and being in way over their head.
The worst thing to do in a situation like this is ignore it, yet that is exactly what some people do. So take those all-important steps to fix your credit file and then be vigilant with staying on track with your credit repayments.
The last thing you want to do is fall into that trap again. Using a financial management plan that you can stick to is the key to staying out of the black-hole that is a bad credit file spinning out of control.
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